GLOBALISATION

Question 1

The reasons for growth of TNCs

Answer 1

MOTIVE: controlling + minimising their costs + increasing revenues by expanding markets 
MEANS: Banking + free flow of capital
MOBILITY: Faster + cheaper transport
•Rapid communication systems
•New production tech, ‘Just In time’
•Global production networks

Question 2

How to measure globalisation: KOF Index

Answer 2

Measures 3 dimensions:
•Economic globalisation: Characterised as long distance flow of goods
•Political globalisation: Characterised by a diffusion of gov policies
•Social globalisation: Expressed as spread of ideas, info + people

Question 3

Effects of TNCs on host countries - POSITIVE

Answer 3

• They are vital sources of FDI - in UK, 2007, created 50,000 jobs
• TNCs stimulate multiplier effect. Company may require locally produced components. Meanwhile, incr wealth + disposable incomes will generate domestic demand, stimulating growth
• TNCs can also increase local skills. In some cases, this may help to offset large-scale unemployment caused by the mechanism of agric
• They are often responsible for the transfer of tech such as JIT
• They May construct or improve infrastructure such as roads

Question 4

Effects of TNCs on host country: NEGATIVE

Answer 4

• Can make others go out of business
• TNCs often face negative attitudes from local authorities, residents and environmentalists.
• Many of the jobs offered are low skilled. Managerial positions are often filled by people who have moved with the TNC, producing little prospects for locals to develop within their jobs
• Some TNCs use cheap labour

Question 5

How to measure globalisation: AT KEARNEY INDEX

Answer 5

Examines the international trends that reveal whether the world’s leading nations are becoming more or less globalised
•GI focuses on:
-Economic integration - FDI/Trade
•Technology connectivity-membership of IGOs
•Political engagement-Tourism, international phone calls

Question 6

Why is China a ‘winner’ of globalisation?

Answer 6

POLITICAL STABILTY: communist gov has been in place since 1949
EMERGING MARKET: wealth trickles down via multiplier effect
STABLE CURRENCY: exchange rate is good
CHEAP FREIGHT: low prices enable TNCs to outsource manufacturing to far off places and make good money
TAX INCENTIVES: China has set up Special economic zones-where businesses can import raw materials without paying tariffs or duties
POSITIVE IMAGE: 2008 olympics to reimage itself

Question 7

Types of globalisation

Answer 7

ECONOMIC: ICT allows managers to keep in touch more easily. Each time barcode is scanned-an adjustment is made with suppliers
SOCIAL: ICT supports migration+cultural traits are adopted
POLITICAL: social networks used to raise awareness of issues. Greenpeace

Question 8

WTO

Answer 8

To ensure that flows are smoothly, predictability and free
BENEFITS:
•The system helps promote peace
•freer Trade cuts cost of living 
•it provides more choice of products
•Trade raises income 
•Trade stimulates economic growth

Question 9

Effects of globalisation

Answer 9

DIV OF LABOUR
CHANGED FOOD SUPPLY
DAMAGE TO ENVIRON
ANTI-GLOB PROTESTS
LESS JOB SECURITY

Question 10

What are the main causes of globalisation?

Answer 10

• Internet
• Containerisation
• WTO-greater movement of people
• Schengen agreement -EU
• Free movement of capital with online banking

Question 11

Foreign direct investment

Answer 11

FDI: controlling ownership in a business enterprise in one country by a company or org based in another country 
Govs can encourage FDI:
•Low Rates of corporation tax
•Tax holidays
•Preferential tariffs
•Free or subsidised land
•Fast track visas

Question 12

Reasons for the global shift

Answer 12

• Transport revolution
• Neo-liberalism - move towards free trade, especially within trade blocs
• financial deregulation - fiscal policies which permitted freer movements
• enhanced role of state-gov policies to attract FDI

Question 13

ADVANTAGES OF GLOBAL SHIFT IN MEDC

Answer 13

• Cheaper imports of labour intensive products can keep living costs down
• growth in LEDCs May lead to a demand for exports from MEDCs
• Promotion of labour, market flexibility + efficiency, greater labour mobility
• greater industrial efficiency should lead to development of new tech, FDI
• Loss of industries can lead to improved environmental quality

Question 14

ADVANTAGES OF GLOBAL SHIFT IN NICS AND LEDCs

Answer 14

• Higher exports - generated income promotes expert led growth thus promoting investment - potentially leads to multiplier effect
• Can trickle down to local areas with many highly paid jobs
• can lead to exposure to new tech, skills + productivity
• employment in labour manufacturing spreads wealth, and addresses development gap

Question 15

Disadvantages of global shift

Answer 15

• Rising job exports leads to inevitable job losses
• big gap develops between skilled and unskilled
• job losses can lead to deindustrialisation

Question 16

Disadvantage of global shift in NICs and LEDCs

Answer 16

• Unlikely to decrease inequality - as jobs tend to concentrated in core region
• disruptive social impacts (role of TNCs potentially exploitative)
• can lead to over-dependence on narrow economic base
• Can destabilise food suppliers
• environmental issues

Question 17

Urbanisation in developing/emerging nations REASONS

Answer 17

1: Mechanisation of agric
2: Rapid pop change due to high birth rate
3: Decline in traditional rural industries such as textiles
4: attraction of better housing + jobs
5: trade liberalisation - incr demand for goods
6: FDI - role of TNCs

Question 18

Globalisation - winners and losers

Answer 18

Some countries have developed faster than others
•New global elite of ‘super rich has emerged, with China’s richest 1% of people owning 1/3 of country’s propert
•Big disparity between developed countries Plus Asian NICs VS developing economies of Africa and Middle East

Question 19

Attempts to control globalisation

Answer 19

•Censorship (China + NK)
—>State controlled tv, radio+monitored media
•controlling immigration -e.g AUS have a points system
Liberalism = free flow of people, capital, finance and resources

Question 20

Sustaining globalisation

Answer 20

GLOBAL AWARENESS - global broadcasting on news coverage + global orgs (Amnesty intnl) have campaigned for human rights
ECOLOGICAL FOOTPRINT -
•to try reduce - Greenpeace
RESPONSE TO GLOB-
•Transition towns-NGOs promote local sourcing as response to glob by increasing sustainability
•Fair Trade + ethical consumption schemes may reduce degradation + inequalities
•Waste management-reducing carbon footprint
•recycling methods + waste reduction